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The Mess We’ve Made of Means Testing

We give subsidies to people who don’t need them, and order the poor to find money they don’t have when they get in trouble with the law.

Jeremy Bentham
The English philosopher Jeremy Bentham wrote that “the relative amount of the fine should be fixed, not the absolute amount.” (University College London)
When I turned 65, I instantly became eligible to ride on any D.C. Metro train for half-price. Perhaps I ought to have been grateful for this windfall, but in fact I found it annoying. I’m not rich by any means, but I can afford to pay full fare for a subway ride. I didn’t appreciate the idea of charging the taxpayers (myself among them) to give me and countless others a benefit we didn’t need. Warren Buffett can ride on the Metro for half-price if he comes to visit Washington. Stupid is the only word for it.

A while later I decided to stop being a self-righteous chump and accepted the discount. But the whole episode triggered a longstanding complaint of mine against misplaced subsidies and charges of all kinds. It started when I learned that blind people are entitled to a special exemption on their tax returns. People who are blind and needy deserve this, of course, but people who are blind and wealthy don’t. I couldn’t understand giving money away to sightless millionaires.

All of this leads to a fairly significant point about American social policy. We’re clueless (and spineless) on the subject of means testing. When it’s a matter of knocking a dollar or so off a transit fare for people over 65, perhaps it’s the sort of thing my children would characterize as a First World problem. But it’s something entirely different when we start talking about our failure to apply rational means testing to fees and fines. That failure, in some cases, borders on tragedy.

You probably have heard of cases like this, but I’ll give you one anyway: A low-income single mother gets stopped for a minor traffic violation, perhaps a broken headlight or an illegal left turn. The fine is a couple of hundred dollars, which is more than she can afford. She is summoned to a court date that she can’t keep because she has to work or care for her children. A few missed court appearances, and she can be sent to jail and/or have her driver's license suspended, possibly costing her the job she holds and needs to have.

It doesn’t seem fair, does it? A middle-class violator can walk into court, pay the fine and then walk out again. At first glance, it might seem equitable to charge everyone the same $490 for driving alone in a carpool lane (which is what California does). But it isn’t equitable. In the words of Brett Simpson, a researcher and journalist who is perhaps the nation’s leading expert on this problem, “For poor Americans, a traffic ticket can be a life-altering disaster. For rich Americans, it’s a minor inconvenience.”

IS THERE A SOLUTION? There may be, one that Simpson and other students of the problem have proposed. It goes under the awkward name of “day fines.” The principle is that you don’t charge everyone the same amount of money for a traffic violation or other minor offense. You levy a fine proportional to the amount the offender earns in a single day of work.

We don’t do that in this country, but lots of other nations do, including Denmark, Finland, Germany and Sweden. Finland has been doing it since 1921. In fact, Finland is the most draconian example of the day fine system. Any violation can cost you half of a day’s income. If you don’t pay up promptly, you lose three days’ income. If you lie about your income, you can go to jail for three months. A few years ago, a Nokia executive was fined 116,000 euros for a speeding violation.

Germany is tough in a different way. The judges there take into account wealth as well as income. So a rich person can’t get away with a small fine just because his money is in stock certificates rather than paychecks. One study of the German system turned up a remarkably small rate of wealth and income hiding — less than 4 percent.

The United Kingdom launched a similar trial around the same time, but ran into strong public opposition and dropped it after a year or so. The main objection was that it could lead to financial ruin for wealthy people who turned out to be innocent. So the U.K. went to a compromise system that provided greater discretion to judges when it came to imposing fines.

Why haven’t we tried some sort of day fine system here? Actually we have, to a very limited extent. In the late 1980s and early 1990s, the Vera Institute, an advocacy organization for criminal justice reform, sponsored day fine experiments in six counties around the country.

These turned out to be short-lived for a couple of powerful reasons. One is that they coincided with a dramatic increase in crime and a general get-tough attitude on the part of the public. The other is that privacy laws in the United States make it more difficult to get quick access to a violator’s income, let alone his total wealth.

So we have pretty much stuck with a one-size-fits-all approach to traffic tickets and other minor violations. In 34 states, according to Brett Simpson, a citizen can lose his or her driver’s license for failure to pay a ticket, regardless of the person’s capacity to pay. In 13 states, failure to pay the fine for a routine violation can bring jail time.

There has been some progress when it comes to charging bail to criminal suspects. A number of states have stopped incarcerating many of these suspects just because they don’t have the money to make bail. But by and large, this reform hasn’t seeped down to the traffic court level.

OF COURSE, THERE’S A LARGER ISSUE HERE. Western society has subscribed for thousands of years to the proposition that crimes are crimes, and similar offenses ought to be treated in similar ways. We talk about an “eye for an eye,” not “an eye for a tooth.” Gilbert and Sullivan’s Mikado proclaimed that “my object all sublime, I shall achieve in time, to let the punishment fit the crime, the punishment fit the crime.” The Mikado wasn’t an attractive character, but his philosophy was representative of Victorian culture.

There have been contrary attitudes. The English Magna Carta of 1215 holds that “fines should not be so large as to deprive a person of his livelihood.” Several centuries later, the philosopher Jeremy Bentham wrote that “the relative amount of the fine should be fixed, not the absolute amount.” There’s little doubt that in many parts of the United States, these principles are being violated for the most minor of offenses.

The questionable use of fines as punishment goes well beyond the inequitable consideration of ability to pay. In the wake of the unrest over police tactics in 2015, it was discovered that the small town of Ferguson, Mo., was deriving more than 20 percent of its revenue from fees charged to minor-crime violators. Not all of these involved traffic offenses, but a large proportion of them did. These fees were essentially a cash cow, not a means of exercising justice. Mike Maciag of Governing broke the news that other small jurisdictions were collecting fines even more greedily. In 2013, Henderson, La., was collecting $3.73 in fines and forfeits for every $1 of taxes.

We know how to treat taxes with something more equitable than a flat-rate penalty. If you are rich, at least in theory you pay the Internal Revenue Service a higher proportion of your income than if you are poor. This principle goes all the way back to the first federal income tax, imposed by the Lincoln administration during the Civil War. Each election year, there are political candidates who urge conversion to a flat-rate federal tax, but these proposals have never gone very far. While 10 states use a flat tax, all the others that have such a tax apply it progressively. There is no shortage of citizen gripes about these rules, but most taxpayers simply accept them.

If the federal government can tax incomes based on ability to pay, then local government could apply the same principle to the fees it charges for misdemeanor offenses. This doesn’t have to mean giving judges total control over how much a speeding ticket should cost. But it doesn’t have to be a meat ax either. Some form of day fine system would be a compromise between too much judicial discretion and too little. Someday perhaps we will have the political will to try it.
Alan Ehrenhalt is a contributing editor for Governing. He served for 19 years as executive editor of Governing Magazine. He can be reached at
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